What Does a Financial Adviser Do? | Financial Planner vs. Financial Advisors

What Does a Financial Advisor Do, Anyway?

What Is a Financial Adviser?

"The financial adviser is also an educator!" 

~Investopedia

Financial Advisor

Common tasks will include managing portfolios full of stocks and bonds; advising clients on appropriate asset allocation between stocks/bonds/cash holdings; investment planning for long-term goals like college savings or retirement income needs; reviewing tax implications when making decisions about investments; discussing future goals, plans, & more. You can find a fiduciary for your business or family to help you build wealth for the long term, and find your long-term strategy even when it's always a moving target. You can get your risk and terms to something you're agreeable to with the right fee schedule for you as well!

What Does a Financial Adviser do?

Financial advisers are responsible for many tasks, including managing portfolios full of stocks and bonds; advising clients on appropriate asset allocation between stocks/bonds/cash holdings; investment planning for long-term goals like college savings or retirement income needs. They also review tax implications when making decisions about investments, discuss future goals, plans, etc. They usually work in teams where each adviser has a different specialization, so they may not only be advising you on investments but also insurance or retirement planning. 

What is the difference between a financial planner and a financial advisor?

Financial planners and financial advisors both work with clients to provide advice about the use of their assets. Financial planners usually focus on long-term planning, such as college savings or retirement income needs; while financial advisors are more likely to advise people on how they should invest for short-term goals like saving up enough money for a down payment on a new house. 

What is the workplace of a financial advisor like?

Financial advisers work in a variety of settings, from brokerage firms to banks. They are usually private practitioners who provide financial advice for a fee as well as sell various products or services on behalf of the company they represent.

The American Financial Planning Association (APFA) reports that there were over 250,000 registered investment adviser representatives nationwide at the end of 2013 and more than 260,000 licensed securities professionals such as brokers and stockbrokers. 

How much do financial advisers cost? 

This varies depending on where you choose to go with your adviser. Fees can range anywhere from less than $100 per hour up to several hundred dollars per hour depending on which service is being offered by the adviser and what type of wealth management plan has to be developed. Most financial adviser firms offer a free consultation, however, to determine if the client is a good fit. When a firm is based on a fee structure, most fee structures start at 0.50% per year which includes services such as: monthly or quarterly reviews; asset allocation planning; portfolio management; estate planning coordination; retirement account distribution and more.

What types of financial advisors are there?

There are several types of financial advisers. The following are the two most common:

Advisors

• Financial Planner (A certified professional with a degree in finance that is not licensed to sell securities)

• Financial Adviser (Registered investment adviser who is both qualified and registered as an independent contractor with FINRA). To register this way, these advisors must complete courses & pass comprehensive exams administered by the National Association of Securities Dealers - NASD Series 65 or 68 examinations, which cover areas such as insurance, taxation, law and investments. They also need to complete 120 hours of qualifying experience before they can take their registration exam.)

Financial Advisers offer advice for clients on investing money through stocks, bonds mutual funds. This includes retirement planning advice on products such as Roth IRA's & individual IRAs.

Do you have to already be wealthy to hire a financial adviser?

Financial advisors are not just for the wealthy. They offer basic advice to people of all income levels, including working families. A financial adviser's time is an important investment in your future and a credentialed professional can help you reach your goals faster than if you were on your own. Financial advisers work one on one with clients to ensure their finances will be successful over the long term and provide guidance through both good times and bad. 

Some benefits of hiring a financial adviser:

The benefits are varied depending on what your need is at the time; however some typical benefits include education about making sound decisions when it comes to investing, tax consequences (especially if this is your first job), and budgeting/financial advice. The folks over at Money & US News (2) have reported that “Financial advisors help investors untangle the knot of their financial lives.” So, if your finances are in tangles, give us a call and let our experience guide you through the untangling process. 

"Financial advisors help investors untangle the knot of their financial lives."

~Money & US News

When Is It Time To Hire A Financial Advisor?

It's time to hire a financial adviser when you are thinking about your long-term financial goals, or if you're feeling the need for help managing day to day finances. Financial advisers can also be helpful in a crisis when you don't know what to do and want someone who is qualified to offer advice on how best to deal with specific issues.

Investment & Retirement

A good time to hire a financial advisor is as soon as you start making money! The earlier in life that people set up an investment plan – whether it's through their employer sponsored retirement program such as 401k, IRA (Individual Retirement Account), savings account, etc., the more likely they are able to accumulate wealth over time.

If You Need To Save Money Quicker...

When clients have trouble saving enough for emergencies or other expenses it might be time to sit down with a financial adviser and see where the flaws in the previous plan might have been.

In many cases, it's not necessary to hire an adviser at all--a little do-it-yourself research can be beneficial when making decisions about investments in high interest accounts (CDs), low risk stocks/bonds, perhaps your average mortgage loans, etc.; but there are times where hiring an advisor is crucial. For example, if someone wants help managing life insurance needs or managing retirement accounts, then a professional is definitely needed.